EXHIBIT 20.1


                                 PRESS RELEASE


                    PENNFED FINANCIAL SERVICES, INC. SELLS
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                          TRUST PREFERRED SECURITIES
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     WEST ORANGE, New Jersey, October 17, 1997 -- PennFed Financial Services,
Inc. (NASDQ:PFSB) announced today that the Company's trust subsidiary, PennFed
Capital Trust I, sold $30 million of cumulative trust preferred securities to
the public. In addition, the underwriter, Ryan, Beck & Co., has an over-
allotment option to sell an additional $4.5 million of the preferred securities.

     The Trust will use the proceeds from the sale of the preferred securities
to purchase junior subordinated deferrable interest debentures to be issued by
the Company. The subordinated debentures mature in the year 2027 and are
redeemable at anytime after five years.

     The Company will use the proceeds from the subordinated debentures for
general corporate purposes, including capital contributions to its wholly-owned
subsidiary, Penn Federal Savings Bank, to support future growth.

     The Bank, headquartered in Newark, New Jersey, maintains branch offices in
Brick, Caldwell, East Newark, Fairfield, Farmingdale, Harrison, Marlboro,
Montclair (2), Newark (3), Old Bridge, Sayreville, Upper Montclair, Verona, and
West Orange. A new branch in Bayville (Ocean County) will open later this month.
The Bank's deposits are insured by the Federal Deposit Insurance Corporation.